January 02, 2003

READER CHRIS WRAY WRITES:

Glenn, now that you've linked a story on the virtues of John Edwards, trial lawyer, perhaps you can comment on this terrrible situation in West Virginia - and explain to your readers how the trail lawyers are not culpable here. Or perhaps you might admit that the pious John Edwards notwithstanding, the trial lawyers have a pernicious effect on the well being of our society, and it's only getting worse.

He also links to this story on the West Virginia doctors' strike over malpractice insurance premiums.

Well, I'm of two minds on this. Though I used to teach torts (I gave it up a few years ago to start teaching Internet Law) insurance policy isn't an area of special expertise. But I think that the tort reform = good / trial lawyers = bad formulation is just as simplistic as the big corporations = bad / trial lawyers = good formulation.

What troubles me most is when trial lawyers are actively allied with government against an unpopular group -- as when states pass special legislation to facilitate lawsuits against tobacco companies or gun manufacturers. That sort of partnership, where political contributions by trial lawyers facilitate legislation that then enriches trial lawyers and allows regulation outside of ordinary democratic processes, seems entirely wrong to me.

On the other hand, subjects like medical malpractice are just a mess. It's true that fear of malpractice suits is crippling medicine. It's also true, though, that there's lots of malpractice that never generates any lawsuits at all, and the medical system doesn't regulate its own bad apples very well. Everybody knows who the bad doctors are, but they don't lose their licenses, or their hospital privileges, very easily. That's improved somewhat, but not nearly enough, in recent years.

On the other hand, though I'm a big fan of juries and I've served on a civil jury myself, I think that the trial lawyers are rather hypocritical in the way they sanctify the jury. Watch them change their tune in the face of proposals to strengthen juries in malpractice cases by, say, allowing the jury to call its own expert witnesses!

Malpractice suits don't play a significant role in preventing bad medicine, or in compensating injured patients -- given that most patients never sue, it's essentially a lottery. Sometimes a particularly bad physician is brought to account, but just as often it's somebody who made an honest and forgivable error of judgment, or who did nothing wrong at all. And in some truly dreadful cases, trial lawyers won't bring suit because there's no money in it; I can think of one in particular I know of that would curl your hair, but that a major plaintiffs' firm turned down because they weren't sure they could make money.

So the social value of malpractice suits is overrated: if you wanted to compensate people who were hurt by bad doctors, or if you wanted to police bad doctors, you wouldn't have a system like this one, where profitability to plaintiffs' lawyers -- which is at best only roughly correlated with severity of harm, and even more roughly correlated, if at all, with severity of malpractice -- is the major determinant of what cases get brought and what cases don't.

On the other hand, the tort system is the ultimate fallback. Leaving aside politically motivated shakedowns like the tobacco suits (which, ironically, basically turned the states and the trial lawyers into virtual partners of the tobacco companies they previously condemned as evil), you see a lot of lawsuits because no other regulatory or quality-assurance system is doing the job. And that's largely the case in medicine. The system used to be run for the convenience of doctors. Now it's run for the convenience of insurance companies. It's run for everyone but patients. Lawsuits won't change that, and limiting them won't either.

ANOTHER UPDATE: A reader points out that I have two "other hands" above. Well, I said I was of two minds, so shouldn't that entitle me to four hands? That means I still have one in reserve!

YET ANOTHER UPDATE: Here's a take on the political context of the Frist / Edwards imagery.

OKAY, THIS IS THE LAST UPDATE: A reader emails:

I found your post thoughtful regarding malpractice suits, but I would add two observations. First, the malpractice issue is a symptom of the real problem, which is government intervention in health care. Prior to the 1960s, there was no "malpractice crises," and there likely would not have been one without the advent of Medicare, Medicaid, and HMOs. It's the government controls that gave rise not just to increased costs, but mediocre physicians as well. There simply are less incentives every year for the best students to go into medicine -- not when then can make a quicker, relatively risk-free buck by becoming a lawyer (a simplistic claim, I admit, but one the admissions numbers for law and medical schools support.)

The second point I would raise is that there is a government alliance at work here, but not necessarily with the trial lawyers, as is the case in the examples you cited. The HMOs and insurers are allied with the government -- notably the FTC and the Justice Department antitrust folks -- in a campaign to prevent physicians getting together to collectively bargain for better compensation. I know, because this has sadly become my specialty in the past year. The FTC has been making examples out of the smallest physician groups in order to scare them into capitulating to large HMO demands. This has nothing to do with protecting competition, as the government claims, but everything to do with passing blame. The government won't admit the failure of their own interventions, so they try and blame the doctors by saying their collective bargaining efforts are unfairly raising patient costs. That the facts don't support this argument is entirely irrelevant, since ultimately the FTC can compel forced settlements out of physicians without going to court.

Sorry for the long post, but I'm getting a little tired of nobody paying attention to this. In some respects, the FTC problem is worse than the malpractice crises. The latter can, and likely will, be fixed with a few legislative adjustments.